Childcare, poverty and sanctions

As a study shows childcare problems are disproportionately affecting the most deprived areas, we look at why this is the case and how leaving childcare to the market doesn’t work.

Nursery children and banknotes, collage image


A report this week about who is being most affected by childcare closures confirmed what a lot of anecdotal reports have been saying. A Guardian analysis of childcare closures in England found the most deprived areas were being disproportionately affected.

Part of the reason is that those in the poorest areas are more reliant on subsidised childcare. This is currently mainly for three and four year olds and – in deprived areas – for two year olds. This is set to expand. The Government’s subsidy for ‘free’ places for three and four year olds has long been significantly less that the actual cost of providing the care. That means nurseries have had to bump up costs for children outside of the ‘free’ care. Those in poorer areas are less likely to be able to afford that, meaning less demand for fully funded places and less money for nurseries.

In some places where nursery chains exist, shortfalls in the most deprived areas can be covered from earnings in wealthier areas. But many nurseries are not part of a chain, particularly non-profits.

There are a number of childcare platforms operating with a laudable aim of providing affordable childcare to parents. However, most of these generally begin by operating in wealthier urban areas where demand and the ability to pay for childcare is higher. Private equity firms have also been interested in investing in childcare due to the demand.

The market dictates

The problem with leaving childcare to the market is that it means that care availability in poorer areas generally suffers disproportionately. Yet childcare is core economic infrastructure – without it it is very difficult for parents to work. There have been stories around about parents – ‘mum-ployees’ in the words of the Daily Mail – ‘shirking from home’ with their children present. But if you can’t afford childcare or there are not the places available what option do you have?

Many parents are reliant on their own parents to provide free care [although those parents are having to work longer, sometimes in poor health, and have less time on their hands to help out] or they tag team with their partner to cover childcare or women drop out of the workplace when their children are little. The Government has recently tightened up benefits rules to force mothers of younger children to seek up to 30 hours a week of work – almost a doubling of the hours they have to seek – or face sanctions.

The Government argues that it is increasing childcare funding, but it sounds from what has been published so far as if the funding for three and four year olds will not only be under the rate of inflation, but also will not make up for the shortfall for the last few years. Nurseries have said that many won’t be able to afford to offer it, in any event.

The likelihood is that those in the poorest areas could face a double whammy of falling nursery places and the threat of benefits sanctions if the disproportionate impact of nursery closures is not taken into account by Job Centre Pluses.

Nursery provision, like school provision, is a basic plank of early development; an investment in the future workforce as well as the current one. It cannot be left to the market and needs to be properly funded.

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